Background for Czechia

Like many other countries, Czechia suffered as a result of the COVID-19 pandemic in 2020–2021.The government’s compensation programmes and expansive fiscal policy helped many companies to stay afloat; however, these measures resulted in significant worsening of the budget balance and public debt. Owing to the Russian war against Ukraine and the energy crisis, there was a sharp increase in the rate of inflation in 2022, with the average rate of inflation rising to 15.1% in 2022 (in comparison with 3.8% in 2021).

The rate of unemployment remained low in 2021 and 2022 (2.8% in 2021 and 2.2% in Q4 2022), and even the unprecedented influx of immigrants from Ukraine in 2022 did not change the situation on the labour market. In 2023, the rate of unemployment stood at 2.6%, 2.5% and 2.6% in Q1, Q2 and Q3, respectively.

Fundamental legislation regarding labour relations can be found in the Labour Code (Act No. 262/2006 Coll.), Act No. 435/2004 Coll. on employment (as amended) and Act No. 2/1991 Coll. on collective bargaining (as amended). The areas regulated by the Labour Code include the start, duration and termination of employment, working discipline, working conditions, working hours, breaks at work, overtime, night work and sick leave. Other areas include wages and the reimbursement of wages, occupational health and safety, employee care, women’s and young workers’ working conditions, labour disputes and compensation for damage. The Labour Code is closely linked to Act No. 309/2006 Coll on ensuring additional requirements for occupational health and safety. It regulates the requirements concerning occupational health and safety in labour law relations. The last extensive amendments, harmonising labour rules with EU law, were implemented in 2000 and 2006.

Act No. 435/2004 Coll. on employment regulates the delivery of the state’s employment policy, the goal of which is to attain full employment, to protect against unemployment, to ensure fair treatment and to prohibit discrimination against people asserting their right to employment. It also regulates the powers of the labour offices and the activities that they perform.

The Civil Code (Act No. 89/2012 Coll.) does not contain direct regulations on employment relationships (which are instead found in the Labour Code); however, it covers all matters not covered by the Labour Code. Previously, the Civil Code was applied to labour law only when the Labour Code explicitly referred to it.

There is no comprehensive legal regulation in Czechia on trade unions, employer organisations and collective bargaining; these legal relations are provided for in several laws:

• the Labour Code, which forms the legal basis for negotiating collective agreements at enterprise and higher levels

• Act No. 435/2004 Coll. on employment

• Act No. 2/1991 Coll. on collective bargaining, which was substantially amended as of 1 January 2007 in connection with the adoption of the new Labour Code and which continues to regulate the collective bargaining process at company and higher (sectoral) levels, the settlement of collective disputes and the extension of higher-level collective agreements (HLCAs)

Act No. 2/1991 Coll. on collective bargaining regulates the collective negotiations between trade union organisations and employers and regulates the participation of the state, if applicable, with the purpose of concluding a collective agreement. Among other things, it regulates the terms of the collective agreement, the procedure of concluding collective agreements, collective disputes, a strike within a dispute related to the conclusion of a collective agreement and lockouts.